NAFTA ‘hot topics’ said unresolved as deal deadline looms

Trudeau, Trump discuss chances for 'prompt conclusion'

Prime Minister Justin Trudeau speaks at a Toyota plant at Cambridge, Ont. on May 4. (PMO photo by Adam Scotti)

Washington | Reuters — U.S. Commerce Secretary Wilbur Ross said on Monday that none of the contentious issues in a new NAFTA trade deal appear to have been resolved, diminishing chances of meeting a Thursday deadline to notify U.S. lawmakers of an agreement.

If the notification is not sent by Thursday, U.S. House Speaker Paul Ryan has said that the Republican-controlled Congress likely would not have enough time to approve an update to the North American Free Trade Agreement before a newly elected Congress takes over in January.

Even under the negotiating law known as ‘fast track,’ trade deals require lengthy notification periods before they can be signed by the president and considered by lawmakers. Congress has fewer legislative days this year due to midterm elections in November.

Speaking at the National Press Club on Monday, Ross said he did not believe any of the “big hot topics” were resolved, including rules of origin for autos, labour issues, U.S. demands for a five-year “sunset” provision and major changes to dispute settlement systems.

“The big topics like that are still a work in progress. And those are very complex issues, particularly rules of origin, so eventually it will come down to every comma, every semicolon, everything before we can figure out if it’s something that’s workable,” said Ross.

NAFTA trade ministers failed in intensive talks last week to reach consensus on the all-important auto content rules, agreeing instead to resume negotiations soon. A deal on autos is considered crucial for the rest of a NAFTA update to fall into place.

Canadian Prime Minister Justin Trudeau and U.S. President Donald Trump spoke on Monday and discussed the possibility of bringing the NAFTA talks to a “prompt conclusion,” Trudeau’s office said.

There are no definite plans for U.S. Trade Representative Robert Lighthizer to meet this week with Mexican Economy Minister Ildefonso Guajardo or Canadian Foreign Minister Chrystia Freeland, although negotiating teams from the three countries are still meeting.

“The ball is in their court,” one Mexican government official said of the Americans when asked about next steps for the NAFTA talks.

Freeland declined to answer questions on NAFTA on Monday at a meeting in Mexico City on the political and economic upheaval in Venezuela.

A spokesman for Freeland said there were no immediate plans for her to travel to Washington, but added that could change.

A USTR spokeswoman, asked if the three ministers would meet again this week, said: “We have no announcements at this time.”

Ross, who is not directly involved in the negotiations, alluded to the idea that talks could still be in progress on June 1, when a U.S. steel and aluminum tariff exemption for Canada and Mexico expires. Lighthizer has linked negotiations on permanent exemptions for the two countries to a deal on NAFTA.

Ross said he doubted that the tariff exemptions would be extended on a monthly basis except in cases where the U.S. was in “continuous negotiations.”

“For example, Canada and Mexico also have the postponement until June 1. So depending on where we are on NAFTA on June 1, the president will decide whether or not to extend their situation,” Ross said. “So it’s unforecastable at the moment.”

— Reporting for Reuters by David Lawder in Washington, David Ljunggren in Ottawa and Dave Graham in Mexico City.